LG CEO Kwon Bong-seok has informed employees the tech giant is considering making big changes to its smartphone business, prompting the so-feared reality of the korean company exiting for good the market in 2021.
“Since the competition in the global market for mobile devices is getting fiercer, it is about time for LG to make a cold judgment and the best choice,” says an LG official in a statement to The Korea Herald. “The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.”
Although the internal memo was confirmed to The Verge, LG says nothing has been decided yet. “LG Electronics management is committed to making whatever decision is necessary to resolve its mobile business challenges in 2021,” says an LG spokesperson. “As of today, nothing has been finalized.”
This new internal memo follows a now-deleted report from Korean outlet TheElec earlier this month that claimed LG was planning to exit the smartphone business. LG branded that report “completely false and without merit,” in a statement to Android Police just a week ago.
As per ARS Technica, LG’s smartphone business has been suffering for a while. As the report points out, LG’s smartphone division lost about 5 trillion won ($4.5 billion) over the past five years. The official earnings count has the division at 22 consecutive money-losing quarters. Today you won’t find LG on a “Global smartphone market share” chart; instead, it will be buried down in the “other” category. In the US, Counterpoint has LG at 13 percent of the market, due mostly to pre-paid sales.
LG has previously promised “wow factors” to try and attract consumers and make its flagging mobile division profitable. LG has tried multiple times with the G7, the V40, the G8, and the V50 to compete with Samsung and Huawei, but it’s not been enough to push its market share in the right direction. LG’s latest Velvet and Wing smartphones have attempted to try something new, but neither were well received.
Samsung, Huawei, Xiaomi, Vivo, and Apple all continue to dominate worldwide smartphone shipments, according to IDC. LG is now turning its focus to its Rollable phone, in an effort to differentiate it from the competition. LG teased the Rollable device again at the Consumer Electronics Show last week, with a “unique resizable screen” that extends from a phone to become a small tablet display.
LG has promised its Rollable device is real and will launch in 2021, but with the company reconsidering its mobile plans it could be one of the last LG phones we’ll see.